March, 2011
Florence and the derivatives machine [updated]
The sad, bonkers story of the derivatives battle between investment banks and Italian municipalities received another footnote on Friday:
Milan, March 25, 2011 — Moody’s Investors Service has today downgraded the City of Florence’s debt rating by one-notch to Aa3 from Aa2.
Tamoil light
From Reuters on Friday:
RTRS – BP SAYS HALTS BUSINESS WITH LIBYAN-CONTROLLED TAMOIL
RTRS- BP SAYS DECLARES FORCE MAJEURE ON ALL TAMOIL CRUDE AND PRODUCT DELIVERIES
FT Alphaville has written before about the risk of Libyan asset freezes hitting one of the country’s best known businesses,
US Markets Live transcript 25 Mar 2011
Markets Live chat transcript for the chat ending at 15:03 on 25 Mar 2011. Participants in this chat were: John McDermott Cardiff Garcia Joseph Cotterill, FT Neil Hume, FT JMGood morning from New York
Reminder: US Markets Live begins in 30 minutes
We’re kicking off promptly at 10am EST, 2pm GMT — and by “promptly” we mean three minutes late.
Topics du jour will be the latest on Japan, Eurozone/Portugal, MENA, plus the fourth quarter US GDP revision and UMich consumer sentiment.
Get yer collateralised Portuguese bonds here
Portugal comes off the market, EFSF comes on the market.
Nomura’s European rates team was thinking ahead on Friday (click charts to enlarge):
Some quick explainers — Nomura assumes a (conservative) €50bn overall estimate for bailing out Portugal,
John Kemp dismantles the commodities vs global demand chart
On Thursday we wrote about the San Fran Fed’s commodities vs global demand chart. Just so you don’t have to go back, here it is again:
We were unsure how to reconcile that chart to another, earlier chart provided by John Kemp of Reuters,
Dear RepoClear Member, Re: Portugal [updated]
We were worrying recently that LCH.Clearnet would hike margin requirements for trading Portuguese bonds (hence, a sell-off).
Something else has come up:
Amendment of RepoClear €GC Baskets to exclude Portugal
Following S&P’s lowering of its sovereign credit ratings on Portugal to BBB on Friday 25 March 2011,
Markets Live transcript 25 Mar 2011
Markets Live chat transcript for the chat ending at 12:25 on 25 Mar 2011. Participants in this chat were: Neil Hume, FT Izabella Kaminska Joseph Cotterill, FT bryce.elder NHHola rabble
Portugal’s negative cash flow
Ahead of Friday’s meeting between Portugal’s political parties and President Aníbal Cavaco Silva and after S&P’s two notch downgrade, we thought this chart (from RBS) was worth an airing.
So,
To value a caja, correctly
Recapitalise, write down, rebuild.
Oops. Hang on. Not sure about this.
Write down, recapitalise, rebuild?
April 28 is a day when Spain really has to make sure it’s got that ordering right. April 28 is caja capital announcements day,
The deleveraging pain in Spain
Here’s a problem for Spain (and to a lesser extent, the US and UK) charted:
It comes from Morgan Stanley’s 125-page European banking presentation, wherein the analysts reinforce their vision for the (reshaped) future of the industry.
364 days later – HMV edition
A year is an awfully long time for a business in structural decline.
Ask Simon Fox, the boss of HMV.
Cast your minds back to March 26, 2010 and HMV’s bullish strategy day, which had the City excited about the margin recovery target at Waterstone’s (2-3 per cent in the short-term,
Bargain basement
For sale, offers over £400,000:
Details from the glossy prospectus:
A purpose-built RGHQ was constructed at Cultybraggan Camp, within the camp security perimeter and was completed in 1990 and is thought to be one of the last and most technologically advanced structures ever built specifically in relation to the Cold War threat.
Tokyo: who’s in the money?
Interesting times in the Japanese stock market – not to mention the shell-shocked country as a whole – as the key Nikkei and Topix gauges ended the holiday-shortened week up a respectable 3.3 per cent and 3.6 per cent respectively.
Further reading
Elsewhere on Friday,
- “Of course the game is rigged.”
- Peace feelers in Libya?
- “We could actually consider the Euro as a vinaigrette.”
- Freezing Gaddafi’s billions in 72 hours.
- Hurtling to a pensions funding gap…
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Gillian Tett: Vix volumes rise could drive investor trends
Does the existence of another hedging tool smooth adjustments or can a “fear” gauge create more fear?,
Snap news
Breaking pre-market news on Friday,
- Standard & Poor’s cuts Portugal by two notches to BBB; warns of further downgrade — report.
- BP seeks determination to proceed with Rosneft share swap transaction — statement.
Further further reading
For the commute home, where your wealth funds are always sovereign,
- A quick who’s who in Yemen.
- Bernanke to start doing quarterly press conferences.
- Surprise! SWFs help prop up autocrats.
More on that commodities vs global demand chart
We posted this chart from the San Fran Fed (via Mark Thoma) in yesterday’s further reading list, but it’s worth a second look:
More than anything, this reminds us of the “missing chart” that we stole from John Kemp and wrote about a little while back:
So long, Saleh
Just flashed across our Reuters screen:
YEMEN’S PRESIDENT SALEH SAYS ON AL JAZEERA: POWER WILL BE TRANSFERRED PEACEFULLY
YEMENI PRESIDENT ANNOUNCES AMNESTY FOR MILITARY PERSONNEL WHO HAVE DEFECTED TO OPPOSITION
Which means we’ll soon know the answer to the question everyone has been asking in recent days as it became increasingly clear that Saleh’s reign was coming to a close:
Oh, my precious
Gold and sliver spot prices were on a tear on Thursday.
Spot gold rose 0.71 per cent to hit a record high of $1,446.40 per troy ounce:
But it was spot silver which lead advances, rising 1.87 per cent to $38.06 per ounce,
Sorry – you still can’t buy OR swap Libyan oil easily, at all
Conversely: ‘sorry rebels – you still can’t get cash to fight the brutal dictator easily, at all’.
Oh dear: one great big flaw has emerged in any plan to buy oil from Libya’s rebels, despite them forming a parallel oil infrastructure.
And the award for extreme optimism in the face of reality goes to
…. someone other than SocGen’s Albert Edwards, who is in fine pessimistic form in his latest strategy note.
This week sees the perma bear take Reuters to task for a recent report on US home sales.
Plummeting in Iberia
Chart via Lombard Street Research. Who add that ‘either Spanish CDS are trading some 100bp too low or Portugal is some 200bp too high…’
Don’t be surprised if NYSE volumes drop
… on account of Citigroup’s reverse share split.
Jeffrey Rubin at Birinyi Associates points out on Thursday that so far in 2011, Citigroup has on average represented 11 per cent of the entire daily volume of the New York Stock Exchange.
Markets Live transcript 24 Mar 2011
Markets Live chat transcript for the chat ending at 12:29 on 24 Mar 2011. Participants in this chat were: Neil Hume, FT bryce.elder NHHola rabble NHsorry I am late NHjust been chatting to people
Disgraced Deutsche banker seeks donations
Spotted on a purported Linked-in profile for the Deutsche banker who was fired after waving money at NHS workers — a solicitation for, erm, cash:
Surely he’s got some of those tenners left?